Leadership in Business: Impact of Character, Ethics, Values and Beliefs

This report analyses the impact of character, ethics, values and beliefs in relation to leadership and evaluates their issues. It also focuses on how leaders can reflect and engage these factors in their leadership style and the challenges and consequences they face while implementing them in everyday organisational context.

Running head: LEADERSHIP IN BUSINESS 0
Leadership in Business

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Introduction
In today’s fast pacing business world, organisations rely on the effectiveness of their leaders
in order to generate a competitive advantage in the industry which assists in sustaining their
future growth. Leadership is defined as the art of inspiring and encouraging others to achieve
specific objectives. A leader performs various functions in an enterprise such as developing
business strategies, providing directions to employees and inspiring followers. The image of a
leader is set by his/her leadership style. As per Marturano and Gosling (2008), leaders
implement different leadership styles based on their characteristics such as charismatic,
strategic, transformations, participatory, transactions, and autocratic leadership style. Each of
these leadership styles has different traits which are referred to crucial characteristics that a
person requires to pose in order to influence and motivate a group or organisations to achieve
desired results. The characteristics of a leader define his/her personality which assists them in
inspiring others and guide them through challenges. Stokes et al. (2016) provided that the
importance of character, ethics, values and beliefs has increased in relation to leadership and
modern leaders are expected to pose these skills while inspiring others. Modern leaders face
issues relating to these factors while operationalizing such ideas in everyday organisational
contexts. The thesis statement is that leadership roles are changing and factors such as
character, ethics, value and belief have become a crucial part of leadership styles which result
in improving their effectiveness; however, they face many challenges relating to them while
performing everyday business tasks. This file will focus on analysing the impact of character,
ethics, values and beliefs in relation to leadership and evaluating their issues. This file will
analyse different leadership theories to understand what extent should a leader is required to
reflect and engage these ideas in his/her leadership style. Furthermore, various challenges and
consequences will be evaluated in the report regarding operationalizing of these approaches
in everyday organisational context.

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Significant of Character, Ethics, Values and Beliefs in Relation to
Leadership
A leader’s character is one of the most important factors which assists in improving the
effectiveness of his/her leadership approach/style. A character is referred to the combination
of traits, qualities and moral which distinguish the nature of a person. A person’s character
whether it is good or bad has the ability to inspire or discourage others from achieving
specific objectives. According to Martin Luther King Jr., the late civil rights leader, followers
judge a leader not based on their appearance, but they judge based on his/her character.
Strokes and Wall (2015) provided that a leader’s character reflects on his/her leadership style
as well based on which followers’ judge the effectiveness of his/her leadership approach. In
recent years, the demand for a character based leader has grown substantially with the growth
in the requirement of talented employees. Character-based leaders’ poses specific skills
which affect the efficiency of the corporation and its employees. Character-based leadership
style focuses on five key attributes which define them such as integrity, trustworthiness,
emotional intelligence, openness and motivation (Sweeney and Fry, 2012). These leaders are
master of trust, and they are able to command respect in leadership. Integrity and
trustworthiness are crucial elements which assist the leader in creating a safe workplace
culture which supports upward communication and openness in the workplace. Stokes (2011)
stated that empathy is another characteristic which is important for a leader to poses in order
to inspire its employee by being emotionally intelligent. Openness in leadership is also
important since it creates a feeling in employees that they are a part of the company, and they
can openly communicate with top-level management regarding their issues. In order to
encourage people to achieve specific targets, a leader is required to motivate them to perform
at their highest capacity. The character of a leader assists them in achieving these targets
which result in improving his/her effectiveness.
The importance of ethics has grown substantially between leaders, and they are expected to
incorporate ethical principles into their leadership approach while taking business decisions.
Leaders of good character are guided by ethical provisions in adverse situations such as
difficult business decisions, dangerous situations for career, economic well-being and social
standing (Crossan et al., 2013). Ethical leadership is directed by ethical beliefs and values and
rights and dignity of others. It is not only important because it leads to strategic and financial
effectiveness, but it is also important because it is the right thing for the greater good. There

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are many examples which prove that lack of ethical leadership led to financial loss and in
some cases, it resulted in the collapse of entire organisations (Bello, 2012). For example,
companies such as Arthur Andersen, Enron and WorldCom which were the market leaders
and decade-old enterprises collapsed due to unethical accounting business decisions and
processes (Walls, Berrone and Phan, 2012). Traditionally, companies are considered as a
profit-making machine for shareholders has changed, and they are expected to fulfil their
social duties as well. The role of corporate social responsibility (CSR) has increased between
enterprises, and they are expected to implement an effective CSR structure to address
different social issues (Du et al., 2013). In many countries, implementation of a CSR
structure is mandatory which require its leaders to take corrective ethical actions in the
business. Other than an effective CSR structure, requirement of ethical leadership has
increased because leaders pose power to influence the actions of their followers for the
greater good. The character of a leaders plays a significant role in ethical nature of its
leadership approach which assists in developing ethical business policies that are focused
towards sustaining the growth of each stakeholder rather than fulfilling the interest of
shareholders.
Values and beliefs are important dimensions of a leader’s character because they allow
followers to see the true intentions of the leader and understand what he stands for which
resulted in improving the effectiveness of his/her leadership approach. Values are defined as
the principles or standards of a leader’s character in regard to something which is important
and worthy. Studies have shown that great leaders have core values and specific beliefs
which resulted in increasing their effectiveness and it inspires a large number of people to
follow their ideas (Jones and Gosling, 2015). The values and beliefs are important part of a
leader’s character because they inspire others to follow their path as well. There are specific
core values which are necessary to pose by each leader in order to become successful such as
transparency, passion, enthusiasm, openness, courage, empathy, humility, trust, honesty,
integrity, vision, and responsibility (Crossan, Mazutis and Seijts, 2013). Effective leadership
theories such as transformation leadership theory are based on these principles. In
transformational leadership theory, the leader works with his/her subordinates in order to
identify change, executing such change and creating a vision which is focused towards
guiding the followers to achieve desired objectives (Odumeru and Ogbonna, 2013). The
theory is based on core values and beliefs of a leader which assist him in inspiring others and

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improving their performance. These factors positively affect the character of a leader and
create a positive image of his/her leadership style among followers.
Reflection and Engagement of Factors such as Character, Ethics,
Values and Beliefs on Leadership Styles
In today’s highly competitive business world, leaders should reflect and engage factors such
as ethics, character, values and beliefs into their leadership style/approach in order to ensure
that they are able to change as per market conditions and address the issues of employees
(Groves and LaRocca, 2012). Modern leaders focus on incorporating these policies into their
leadership style for two main purposes. The first reason is that it enables the company to
achieve its CSR policies which result in positively affecting its brand image. The second
reason is that it has proven by a number of studies that implementation of these factors
resulted in improving the effectiveness of a leadership style. For example, Tim Cook, CEO of
Apple, has applied a democratic leadership approach which is entirely different from Steve
Jobs leadership approach. Cook has often described by his employees as charismatic leader
who focuses on fostering business as well as employee relationships. Cook focuses on
fulfilling the CSR policies of the enterprise by performing his duties ethically. He takes
business decisions based on core values and beliefs which also positively affect the reputation
of the company (Iclarified, 2013). For example, Apple invests heavily in making renewable
energy as their primary source of power and using it for their production processes. Recently,
the corporation announced that it is globally powered by 100 percent renewable energy (Statt,
2018). Furthermore, the company make its products in an environmentally friendly manner
and recycle it completely by using the latest technologies. These factors result in increasing
the brand image of Apple which positively affects their profitability as well, for example, the
company has reported solid revenue of US$61.1 billion in the first quarter of 2018 (Sify,
2018).
The example of Tim Cook proves that leaders can and should rely on factors such as ethics,
character, values and beliefs which provide them a competitive advantage. However, each
leadership style differently incorporates these factors which affect the decision of a leader.
For example, Servant leadership style provides that leaders should prioritise the needs of their
employees and encourage collective decision-making. This style is becoming popular among
modern companies because the demand for talented employees has grown and leaders focus
on retaining them into their organisation (Landis, Hill and Harvey, 2014). This leadership

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style incorporates an empathic character of the leader which focuses towards fulfilling the
requirements of his employees. On the other hand, transactional leadership style focuses on
group organisation by establishing a clear chain of command. This approach focuses on
establishing a carrot and stick approach in which employees receive benefits based on their
performance. In this leadership style, leaders offer an exchange to employees in which they
reward good performance while punishing bad practice. Bolden, Witzel and Linacre (2016)
stated that although this strategy is a good way of achieving short-term goals, however,
studies have shown that employees are unlikely to reach their full potential in these
conditions. Another leadership approach is autocratic leadership style which is an extreme
version of transactional leadership. In this approach, the leaders maintain significant control
over employees, and they did not take their suggestion while taking business decisions. Many
experts argued that this approach is unethical and ineffective in modern organisations. This
approach resulted in increasing employee turnover and absenteeism rates, and it also creates a
negative working environment at the workplace (Jackson and Parry, 2011). Therefore, it can
be seen that it is important that leaders rely on and engage with factors such as ethics,
character, values and beliefs into their leadership style because it assists them in ensuring that
they are fulfilling the interest of each stakeholder and sustaining the growth of the enterprise.
Challenges and Consequences face by leaders while implementing
these approaches into everyday organisational context
While implementing factors such as ethics, character, values and beliefs into a leadership
style, leaders face a number of issues which resulted in reducing the effectiveness of their
approach. As the requirement of ethical leadership approach increases, the issues relating to
them increases as well. Leaders face a number of challenges of operationalizing ideas such as
ethics, character, values and beliefs in everyday organisational contexts. One of the major
challenge faces by leaders is consistency in adhering to these policies. A leader can take
ethical business decisions based on his/her values and implement it across the enterprise. As
per Marturano and Gosling (2008), he/she can also encourage employees to follow such ideas
and belief for the greater good of the society however in day-to-day business operations the
ability of a leader to consistently adhering to the rules is difficult. Similarly, employees also
face difficulty in adhering to these rules as well which resulted in negatively affecting their
work. In case of multinational corporations, it is difficult for a leader to implement ethical
policies to ensure that each branch complies with the same (Burnes and By, 2012). In case

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leaders mistakenly take action against the principle then it adversely affects his character in
front of employees, and they started doubting his beliefs. For example, if a manager is
encouraging employees to recycle and become eco-friendly, and mistakenly he failed to
comply with such guidelines will send a wrong message to employees, and they might
disobey the regulations as well.
Furthermore, implementation of these factors affects the daily operations of business because
they result in reducing its efficiency. A corporation is required to take quick decisions in
order to address the rapidly changing market requirements, however, while complying with
ethical policies, the efficiency of the decision-making process reduces which negatively
affects the effectiveness of the enterprise (Schaubroeck et al., 2012). Moreover, these policies
require leaders to divert their focus from the core business activities to other issues which do
not contribute to the success of a company. According to Roe (2017), they are also required
to increase their investment in activities such as environmental protection which does not
result in improving their profitability and reduces the returns of shareholders. In case of large
enterprises, it is easier for them to invest in these policies since they have large resources
however it is difficult for leaders in small and medium enterprises to take these decisions
since they have limited resources. Their primary focus is to increase the return of
shareholders rather than reducing their environmental impact which affects their leadership
approach as well. Employees are less likely to follow leaders who focus on increasing profits
rather than taking actions for the greater good (Western, 2013).
Leaders face many other challenges in complying with these requirements while making day-
to-day business decisions. For example, it is difficult for a leader to change the beliefs and
values of his/her employees because people have different beliefs which are based on their
experiences. As per Gosling, Sutherland and Jones (2012), people have their own set of belief
which they acquire through experiences throughout their life. In case of a leader, it is not
possible to keep everyone happy, and he/she has to make difficult business decisions which
negatively affect one or more parties. These actions resulted in making people thinking
negative about a leader, and they are more like to judge his character as well. Furthermore,
honesty is one of the crucial requirements of a positive leader’s character however it can
make people think that the leader does not have empathy towards employees if he judges
their performance (Demirtas and Akdogan, 2015). For example, if an employee is not
performing well in the company, then the leader can honestly tell him that his performance is
lacking however it can make him unhappy or discouraged because he might think that the

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leader does not care about his issues. Therefore, leaders are required to carefully assess these
values before taking business decision regarding employees. As per transformational
leadership theory, the leader should not directly judge the work of an employee in front of
others, instead, he should communicate with him to understand the issues due to which he/she
is not performing at his/her best. The leader should provide him practical solutions in order to
address the issues face by him which resulted in improving his productivity.
Similarly, leaders face many issues while implementing an ethical approach in the business.
Bolden et al. (2011) stated that although the times have changed and companies are expected
to fulfil their social responsibilities, however, implementing a CSR based approach resulted
in reducing their profitability. Ethically companies should implement an effective CSR model
that focuses on major issues such as providing a positive working environment for
employees, reducing the company’s carbon footprints, ensuring ethical working conditions
for labours and others. Though implementation of these factors creates a positive brand image
of the corporation, however, it also resulted in increasing their overall costs and reducing
their efficiency which negatively affects their profitability. There are different ethical theories
which provide different ethical approaches which make it difficult for leaders to take ethical
actions. Utilitarianism is a normative ethical theory which provides that rightness and
wrongness of action are solely based on its outcome or consequences (Letwin et al., 2016).
For example, if killing one person saves the lives of five people, then it is ethical to kill such
person. On the other hand, Deontology ethical theory judges the rightness and wrongness of
an action based on rules (Sacco et al., 2017). For example, a person can shoot an intruder
with an intention to kill him in order to save his family because it is his duty to protect his
family. Leaders have specific values and beliefs which increases their issues as well. An
organisation is a combination of people who belong to different backgrounds, culture,
religion, caste or race. Similarly, each person has their own values and beliefs which can be
different from the leader. The leader faces difficulty in aligning his/her values and beliefs
with employees or completely changing them. These issues increase the issues faced by a
leader, and they resulted in reducing the effectiveness of his/her leadership style.

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Conclusion
From the above observations, it can be concluded that factors such as character, ethics, values
and beliefs play a crucial role in influencing the effectiveness of a leadership style. The
popularity of effectiveness of leadership is growing substantially as the competition between
enterprises grows. Leaders have to incorporate these factors into their leadership style
because it enables them to analyse the issues face by employees and provide practical
solutions for resolving such problems which resulted in improving their productivity.
Although these factors are focused towards improving the effectiveness of leadership
approaches, however, leaders face a number of challenges while implementing them in
everyday organisational context. The leaders face issues such as inconsistency, delay in
decision-making, the inefficiency of operations, dissatisfied employees, unethical operations,
increase overall costs and others. These factors challenge the leadership approach of
managers and create barriers in front of them. However, these factors contribute to increasing
effectiveness of leadership approach in the long run. Therefore, leaders should focus on
successfully incorporating these policies into their business structure rather than avoiding
them. It will result in creating a positive working environment which encourages employees
to improve their performance and sustaining the future growth of the enterprise.

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